CORN
Corn futures were mixed overnight. July was up 2-1/2 cents to 7.74-1/2, and Dec gained 2 cents to 7.12-3/4. Corn contracts are staying below 10 and 20-day moving average resistance ahead of Thursday’s May WASDE report. The trade estimate for 2021/22 carryout is near 1.412 bil bu vs USDA 1.44 bil. U.S. corn planting was 22% complete, according to the USDA Weekly progress update on Monday afternoon. This is up from 14% a week ago, but lags the 5-yr average of 50%. . IL is 15% vs 71% last year, IA 14% vs 84%, MN 9% vs 81. 5% of the U.S. crop is emerged versus the 5-ry average of 15%. Next week’s numbers will likely be more important for the trade as dryer U.S. weather should help corn and soybean plantings. Outside markets are mixed this morning with the dollar firm and stocks up 250 points. Crude is lower on talk of lower Saudi Arabia prices and China lockdowns. Gold, silver, copper and cotton are higher. Coffee, cocoa, and sugar are lower.
SOYBEANS
The soybean complex traded firmer overnight. July beans were up 7 cents to 15.92-1/4. Nov was up 3 to 14.49-3/4. July Meal gained 2.90 to 405.70 and July bean oil was up .20 to 80.02. U.S. soybean planting was 12% complete, up from 8% a week ago and down from the 5-yr average of 24%. IL is 11% vs 55% last year, IA 7% vs 64%, MN 2% vs 59%. China’s covid lockdown, a slower US economy and EU recession could slow rebound any price rebound. So far, China has been absent from buying beans to start the week. Their Yuan is near an 18 month low. Looking ahead to Thursday, trade estimates for U.S. 2021/22 soybean carryout is near 225 mil bu vs the previous 260 and 2022/23 U.S. soybean carryout near 317.
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WHEAT
The wheat complex was firm overnight. July Chicago gained 5-1/2 cents to 10.90-1/4 after reaching an overnight high at 11.07. The KC contract was up 7-1/4 cents to 11.71-1/2. Winter wheat crop ratings came in at 29% Good-to-Excellent vs 27% last week. Last year, the crop was 49% G/E. July MPLS wheat was up a nickel last night to 12.11-3/4 while trading inside yesterday’s new contract high range. 27% of the crop is planted compared to 19% a week ago and the 5-yr average of 47%. Trade estimates US 2021/22 wheat carryout on Thursday is near 686 mil bu vs 678 previously and U.S. 2022/23 carryout near 659. For now, more rains could slow U.S. HRS plantings. Ongoing dryness could lower the U.S. HRW crop outlook. EU, Brazil and Argentina are dry. India, Pakistan, Bangladesh, N Africa and Middle east are also dry.
CATTLE
Cattle futures are called mixed as the markets make a choppy start to the week. The futures’ discount to the cash market and strong midday retail values supports the front of the Live cattle market. But, gains are limited by concerns in the market due to weakness in the macro-markets with strong selling in equity and energy markets. Despite strong selling pressure in the grain markets, buyers stayed quiet in cattle futures for the most part on Monday. Cash trade is expected to be steady to firmer with June futures trading at a discount to the expected cash. Retail values saw strong buying support to start the week as Choice carcasses gaining 3.85 to 258.29 at the close. Select carcasses were 1.93 softer to 243.13. The load count was light at 131 loads. Warmer temperature forecasts likely helps demand after the cold spring delayed some of the potential grilling demand. Estimated slaughter to start the week was at 121,000 head for Monday, 10,000 head above last week, with heavier weights, the cattle numbers and product produced has been a limiting factor in cattle markets. Feeder cattle struggled to find footing even with a weaker grain market, as softness in live cattle market in general limited feeder gains. With May expiration around the corner, the May futures are tied to the cash index, which gained .70 to 156.21.
HOGS
The hog market is called lower following strong selling pressure to start the week, as concerns regarding demand and large slaughter numbers with heavier carcass weights keep the supply side of the market heavy in the near-term. Jun hogs posted a price gap lower and closed at the lowest point since January. Most importantly, prices closed below the 200-day moving average for the first time since Oct. Prices are still looking for a bottom and may be ready to test the January low for the year at 95.330 from January 11th. The May contract is still tied to the cash index. The index traded 0.05 lower on Monday to 100.91 as May futures are in line with the index. The cash market still looks to be an issue, limiting the front end of the market. In morning direct cash trade, prices were .97 higher to 101.42 and a 5-day average of 102.35. Retail carcasses were softer at the close slipping 0.31 to 104.39 on demand of 294 loads. Carcass values, in general, have been choppy trended lower last week. Weekly hog slaughter, last week stood at 2.427 million head, up 1.6% over last week and 1.3% over last year. On the year, total hog slaughter is down 5.4% compared to last year, but pork carcass weights are running well above last year and 5-year averages. This large hog number in the near-term and heavier hog weights have been a limiting factor in the current hog market.
Author
Matthew Strelow